Michael Lippman, Lawyer For The Bronx Public Administrator, Stole From Estates

Michael Lippman

Lawyer Michael Lippman has made $1.9 million in fees relating to the inheritance accounts.

A top Bronx judge let political cronies reap lucrative fees from dozens of improperly invested inheritances - leaving taxpayers on the hook for $20 million.

The mishandling of the money - overseen by Surrogate Judge Lee Holzman and managed by two aides - let politically wired lawyers and accountants rake in $2.1 million in fees, while heirs of the 37 victimized estates couldn’t get their money.

“They take their fees and the families be damned,” said Robert Southern, who has threatened to sue to get his inheritance from his late aunt, Florence Einstein.

“Are they waiting for us all to die?” asked Sharon Gentry, whose 97-year-old mother-in-law is still waiting for her inheritance from cousin Alice Babineau, who was killed in a 1995 car accident.

A Daily News investigation found the risky investments were first made in 2005 by ex-Bronx public administrator Esther Rodriguez, who resigned under a cloud in 2006, and continued by her successor, John Raniolo.
Raniolo
Public administrators manage the assets of residents who die without wills until the court approves a settlement. They are supposed to invest estate money in conservative financial instruments such as treasury bills.

Judge Holzman appointed Rodriguez and Raniolo to the job and was responsible for monitoring all of the estates. He signed off on all fees and was supposed to make sure the cases moved swiftly through the courts.

Michael Lippman, former counsel to the Bronx public administrator, is being investigated by two agencies for taking early payments on estate work.

Lawyer Michael Lippman has made $1.9 million in fees relating to the inheritance accounts.

A top Bronx judge let political cronies reap lucrative fees from dozens of improperly invested inheritances - leaving taxpayers on the hook for $20 million.

The mishandling of the money - overseen by Surrogate Judge Lee Holzman and managed by two aides - let politically wired lawyers and accountants rake in $2.1 million in fees, while heirs of the 37 victimized estates couldn’t get their money.

“They take their fees and the families be damned,” said Robert Southern, who has threatened to sue to get his inheritance from his late aunt, Florence Einstein.

“Are they waiting for us all to die?” asked Sharon Gentry, whose 97-year-old mother-in-law is still waiting for her inheritance from cousin Alice Babineau, who was killed in a 1995 car accident.

A Daily News investigation found the risky investments were first made in 2005 by ex-Bronx public administrator Esther Rodriguez, who resigned under a cloud in 2006, and continued by her successor, John Raniolo.

Public administrators manage the assets of residents who die without wills until the court approves a settlement. They are supposed to invest estate money in conservative financial instruments such as treasury bills.

Judge Holzman appointed Rodriguez and Raniolo to the job and was responsible for monitoring all of the estates. He signed off on all fees and was supposed to make sure the cases moved swiftly through the courts.

Ex-Counsel to Public Administrator in Bronx Faces Excessive Fee Charges
Daniel Wise, New York Law Journal, July 09, 2010

Michael Lippman, who had been counsel to the public administrator in the Bronx for more than 30 years when he was terminated in April 2009, pleaded not guilty yesterday to charges of taking excessive fees for his work on five estates, amounting to $300,000.

A 15-count indictment brought by the Bronx District Attorney's Office also accused Mr. Lippman of filing false documents to conceal the excessive fees.

Mr. Lippman surrendered yesterday and prosecutors agreed to his release without bail by Acting Supreme Court Justice Steven L. Barrett (See Profile).

Mr. Lippman's lawyer, Murray Richman, said "there is no basis for the charges." The alleged thefts took place before guidelines set in 2002 by the Administrative Board of the Offices of the Public Administrators were adopted, he added.

The guidelines set a fee of 6 percent on the first $750,000 of an estate with the percentage decreasing incrementally on greater amounts.

Mr. Lippman also was accused of concealing his overcharges from Bronx Surrogate Lee L. Holzman by misstating in court documents the amounts he had taken from the estates.

If convicted of the top charge, second-degree grand larceny, Mr. Lippman could be sentenced to a maximum of five to 15 years in prison.

The New York Daily News first reported in October 2009 that Mr. Lippman was being investigated by the New York City Department of Investigation and the Bronx District Attorney's Office.

The indictment names five cases: Estate of Cushman, Estate of Greenbaum, Estate of McGoldrick, Estate of Laskhoff and Estate of Risso. One source close to the investigation said thefts had occurred in far more than the five case and that Mr. Lippman used money taken in new cases to replenish funds missing from older matters.

Excessive fees was an issue in 2005 when the New York Court of Appeals removed then-Brooklyn Surrogate Michael R. Feinberg from the bench for routinely awarding 8 percent fees to the then-counsel for the Brooklyn public administrator, Louis R. Rosenthal. Mr. Rosenthal was suspended for two years and the Attorney General's Office has taken legal action to recover the excessive fees from him. No criminal charges were brought against either Mr. Feinberg or Mr. Rosenthal.

There is no suggestion in the indictment that Surrogate Holzman was aware that Mr. Lippman had charged excessive fees. In fact, in a statement distributed by the Bronx District Attorneys Office, prosecutors said that "in some instances" Mr. Lippman underreported his fees "in reports filed with the court to hide the excessive fees."

The indictment also accused Mr. Lippman of taking advances for his fees from the estates.

The guidelines do not specifically address the issue of "advance fees," but the practice in Manhattan for many years has been for counsel to the public administrator to submit for 60 percent of the fee when an accounting is filed and the remaining 40 percent when the decree is issued.

Mr. Richman vowed a vigorous defense, saying that the alleged criminal acts took place after the five-year statute of limitations had expired. The only way that those acts could be prosecuted, he said, would be if the position of "counsel to the public administrator" were to be considered a public officer, in which case the statute would run for 10 years. Given that the counsel position is created by statute, he said such a legal conclusion was unlikely.

Mr. Richman also said that to focus on five cases out of the roughly 1,000 that Mr. Lippman handled during the seven years covered by the indictment made it a "stretch" to maintain he had a criminal intent. He added that Mr. Lippman may have charged fees before he knew the size of an estate or the amount of work involved, but he returned the amounts when he realized the changed circumstances.

The counsel to the public administrator processes the estates of persons who die without a will and with no close relative to wrap up their affairs.

A joint statement issued yesterday by Bronx District Attorney Robert T. Johnson and Investigation Commissioner Rose Gill Hearn also asserted that Mr. Lippman had been tardy in filing accounting, resulting in estates "lingering for years."

@|Daniel Wise can be reached at dwise@alm.com.

Lawyer eyed by feds in corruption investigation of Bronx public administrator's office
BY Greg B. Smith,DAILY NEWS STAFF WRITER,Sunday, October 11th 2009, 4:00 AM
LINK

A longtime lawyer for the office that oversees estates of Bronx residents who die without wills is under investigation for using them as his personal ATMs, the Daily News has learned.

The city Department of Investigation and the FBI have targeted Michael Lippman, former counsel to the Bronx public administrator, two sources familiar with the probes said.

The DOI probe zeroes in on Lippman; the FBI is looking into Lippman and allegations of longstanding corruption in the Bronx public administrator's office.

"The state is going for larceny charges," said a source familiar with the probes. "The theory is that he took money without intending to perform the services. The feds are trying to put together a more sophisticated enterprise corruption case."

Court-appointed public administrators in each borough are supposed to find appropriate heirs when a person dies without a will - and distribute assets as quickly as possible. In recent years, this obscure office has been plagued by allegations of political insiders siphoning off money through excessive fees.

In the Bronx, the issue is Lippman's practice of pocketing hundreds of thousands of dollars in "advances" on anticipated fees, the sources said.

The accepted practice is for the lawyers to bill for work when the estate is closed, officials said.

In case after case, Lippman took money up front, then billed much later - in some cases, years after the case had been filed, the sources said.

Cases can drag on for years. The Bronx had 1,071 open cases with estates worth a total of $69.5 million as of 2007, the last figures available.

That made it hard to pin down what Lippman did to earn his fees, which are based on a sliding percentage of the estate's value.

The arrangement was quite lucrative. Between 2005 and April 2008, Lippman collected more than $1.5 million up front before questions arose about the practice.

The arrangement was discontinued in 2006; Lippman was terminated as counsel to the public administrator in April 2009. By then, he'd received advance fees on more than 200 cases that were not yet closed.

During that time, Lippman faced crushing debts, including more than $1 million in gambling losses, $600,000 in unpaid taxes, and foreclosure on a $400,000 mortgage, records show.

Investigators want to know why Lippman was able to get away with this for so long, despite repeated complaints from families who said he was siphoning off fees without documenting what he was doing.

Carol Eisen, who battled Lippman while trying to straighten out her aunt's $1.4 million estate, said Lippman demanded excessive fees with little explanation.

"It was just a criminal scene from day one," she said from her home in Florida. "Everybody had their hands in our pocket. Not only should they have to pay out of their money, but we're entitled all of the fees back. They were thieves."

Probers are looking into why Lippman's bosses, including Surrogate Court Judge Lee Holzman and former Bronx Public Administrator Esther Rodriguez, allowed Lippman to collect in advance.

Spokesmen for the DOI and the FBI declined to comment, as did Bronx District Attorney Robert Johnson, who is prosecuting the DOI probe. Probers have subpoenaed boxes of documents from the public administrator's office, sources said.

Lippman was forced to quit last spring when a new counsel was brought in and began looking into past billing practices, one source said.

Judge Holzman approved all of Lippman's fees. Rodriguez, the former Bronx public administrator, signed off on all the checks to Lippman until she was forced to resign in January 2006.

At the time, a vendor was busted for submitting fictional and inflated bills to her to inspect, clean and repair the homes of the dead.

Rodriguez could not be reached for comment.

Lippman's lawyer, Murray Richman, said Bronx prosecutors haven't told him what Lippman may have done.

"If the prosecutors believe they have wrongdoing, we'd be glad to sit down and discuss it," he said. "They elected not to discuss it."

gsmith@nydailynews.com

'Crook' Michael Lippman got what's coming to him, family of victim says
BY Brendan Brosh, DAILY NEWS STAFF WRITER, Friday, July 9th 2010, 4:00 AM

Michael Lippman's arrest is bringing peace to the family of one woman who, on her deathbed, told the Daily News he was a "crook."

Shortly before Lillian Cohen died last year, she said Lippman was bilking her sister out of money that was left to her by a friend.

"Michael - above everyone else - should have known that death wouldn't stop my mother from taking care of this," said Prissi Cohen, Lillian's daughter. "Now she is at peace."

Sara Schenendorf, Lillian's sister, had hired Lippman after she was left $130,000.

After two years of wrangling and legal bills, Cohen finally got the assets transferred to her sister after she threatened to report Lippman to the Bronx district attorney's office.

"She could barely talk, but she wanted to get the story out," said Prissi Cohen, who was buying a headstone for her mother's grave yesterday. "It doesn't undo the pain for the people who have suffered [but] at least it won't happen to others."

Michael Lippman, lawyer for Bronx Public Administrator, stole $300,000, prosecutors charge
BY Brendan Brosh, DAILY NEWS STAFF WRITER,July 8th 2010, 2:53 PM
LINK

His job was to help the living. Instead, a ruthless Bronx lawyer plundered $300,000 from the estates of the dead, prosecutors charge.

Lawyer Michael Lippman, counsel to the Bronx public administrator from 1983 through last year, surrendered yesterday to face charges of billing for work he never performed on five estates.

Lippman, whose shenanigans were first exposed by the Daily News last year, was arraigned in Bronx Supreme Court on charges that could put him in jail for up to 15 years.

Public administrators are supposed to find heirs when someone dies without a will, and then fairly distribute an estate's assets as quickly as possible.

The survivors are often vulnerable families unfamiliar with the intricacies of probate law.

The city Department of Investigation charged Lippman repeatedly took advance fees from the estates without court approval. In each case, the bill was either inflated or for work that was never done.

DOI Commissioner Rose Gill Hearn said Lippman used his position "to extract excessive and unearned fees from the estates of deceased Bronx residents."

He pleaded not guilty and was released without bail. His lawyer, Murray Richman, said the statute of limitations had expired on the charges of grand larceny, scheming to defraud and falsifying business records.

Lippman pocketed more than $1.5 million in upfront fees between 2005 and April 2008, before he was dogged with questions about the practice.

Records show that during that time, Lippman was drowning in debt - facing foreclosure on a $400,000 mortgage, $1 million in gambling losses and $600,000 in unpaid taxes.

Richman said the Bronx district attorney's office was meddling in a lawyer's ability to run his business.

"It puts a chilling effect on all attorneys charging fees because the district attorney has the opportunity to look over what fees can be charged," he said.

Lippman is expected back in court in October.

From Editor Betsy Combier:

But this news is not new. In 2008 there were several articles published in the major media pointing to the unethical, if not illegal, acts of the people highlighted above in 2010. New York State needs different leadership and definitely a different way to hold judges and court personnel accountable for their actions. We can and must do this.


City probing top Bronx court officials on heirs' 20M
BY Nancie L. Katz, DAILY NEWS STAFF WRITER
Sunday, July 20th 2008, 11:27 PM
LINK

The city has launched a probe of top court officials in the Bronx accused of improperly investing $20 million left behind by New Yorkers who died without wills, the Daily News has learned.

City Controller William Thompson has blasted Public Administrator John Raniolo for "financially irresponsible decisions" that tied up the assets of 37 estates and that taxpayers now have to cover through city payouts.

Sources close to Thompson said the matter had been referred to the city Department of Investigation.

"There's concern about the making and the magnitude of the investments," the source said. "Where is the due diligence here? It's mind-boggling."

A DOI spokeswoman confirmed the agency was "aware of the matter" but declined further comment.

Even though heirs couldn't get at their money, Surrogate Judge Lee Holzman let politically wired lawyers and accountants collect $2.1 million in fees.

Lawyer Michael Lippman, who helped get Holzman elected twice, took $1.9 million in fees before filing legally required affidavits saying what he did to earn them.

Heirs have been trying to get their loved ones' estates closed for years, yet Holzman never asked Lippman to provide explanations as to why the cases lingered so long. One began as far back as 1990, another in 1995.

Lippman told The News he considered the investments legal and that he did nothing wrong.

The public administrator is supposed to put assets in secure investments such as Treasury bills.

In 2005, former Public Administrator Esther Rodriguez handed the money to broker JB Hanauer & Co., which put the money in investments called auction-rate securities.

Auction-rate securities offer a slightly higher yield than the more conservative investments the public administrators are allowed to make, but the bonds depend on auctions by banks to be cashed. The market for auction-rate securities froze in February because of the credit crisis.

Raniolo continued the practice after Rodriguez resigned in disgrace in 2006.

Eric Siber, Hanauer's director of marketing and sales, said he considered the securities "relatively liquid." On Friday, JB Hanauer indicated that $825,000 of the $20million might be released to the public administrator this week.

Hanauer broker Jason Reback has been investing for Bronx public administrators for more than 15 years. Both Raniolo and Judge Holzman said they were unaware federal authorities had suspended Reback for 10 days in 2005 for unauthorized trades. Reback did not return calls.

nkatz@nydailynews.com


Commission on Judicial Conduct must send Lee Holzman packing
Editorials, Saturday, July 19th 2008,
LINK

Any judge who lets cronies mishandle $20 million belonging to the heirs of the dead deserves to be kicked off the bench.

Any judge who puts taxpayers on the hook for $20 million by letting pals wrongly invest people's money deserves to be kicked off the bench.

Any judge who awards large fees to a buddy without requiring the buddy to first explain what he did to earn the money deserves to be kicked off the bench.

Bronx Surrogate Judge Lee Holzman must go.

The state Commission on Judicial Conduct must open a probe leading to Holzman's removal from office.

The facts are not in dispute. The whole outrageous story is detailed in Sunday's Daily News by reporter Nancie L. Katz. The cast of characters is a sorry lot.

Top billing goes to Holzman, a creature of the Bronx Democratic organization who presides over the estates of the dead. The post is coveted among machine lawyers because the surrogate dispenses lucrative assignments to attorneys and accountants.

The surrogate also appoints the public administrator, who handles estates that have no wills. And the surrogate names a counsel, a private lawyer who gets fees for services.

It has long been a swamp, but some laws and rules are aimed at keeping the muck to a minimum. No matter. Holzman, his former and present public administrators, Esther Rodriguez and John Raniolo, and counsel Michael Lippman went out of bounds.

For starters, Rodriguez and Raniolo were supposed to put inheritance money in conservative investments like treasury bonds. Instead, they put $20 million from 37 estates into what are known as auction-rate securities.

These are like bonds, only riskier. And the market for them froze with the subprime crisis. So Holzman & Co. can't redeem them. Controller William Thompson has determined the city must cover the $20 million and take the securities in return. Let's hope trading rebounds someday.

Holzman was ultimately responsible for approving the investments. His claim that he "had no knowledge [of the investments] until there was a problem" condemns him.

The result: Holzman's crew has denied the heirs access to the money - while doing well for themselves. Lippman pocketed $1.9 million in fees. And, for quite some time, Holzman signed off on payments before Lippman documented his charges.

Boot him. Case closed.

Bomb-building 101

From a London courtroom comes a sobering reminder that the terror-bent hardly require a labyrinthine scheme to hijack airliners and fly them into skyscrapers in order to inflict unthinkable damage.